• Completed projects - A project that has met its completion criteria falls into this category.
• Terminated projects - A project that was terminated before its completion falls into this category. A project can be terminated at various stages for various reasons. Some examples are:
o The project management plan is not approved for whatever reason.
o The project has been executing, but you have run out of resources, and no more resources are available.
o The project has been cancelled because it was going nowhere.
o The project has been indefinitely postponed because there is not a large enough market for the product it would produce.
A project, in general, may have in-house activities i.e., project activities being performed within the performing organization and procurement activities. Accordingly, there are two aspects of project closure:
• Close the in-house activities of the project.
• Close the procurement part of the project.
Project closure includes the following activities:
• Activities to verify that all deliverables have been provided and accepted
• Activities to confirm that all the project requirements, including stakeholder requirements, have been met
• Activities to verify that the completion or exit criteria have been met
• Activities to ensure that the project product is transferred to the right individual or group
• Activities to review the project for lessons learned and archive the project records
You need to obtain final closure, such as acceptance signoffs, contract closure, or receipts for both the in-house part and the procurement part of the project and from both internal and external vendors and customers. You perform this task by using standard accounting practices and following the relevant organizational and legal procedures, such as SOX compliance.
SOX refers to The Sarbanes-Oxley Act of 2002, also known as the Public Company Accounting Reform and Investor Protection Act of 2002. It is a United States Federal law enacted on July 30, 2002, in response to a number of major corporate and accounting scandals that affected companies such as Enron and WorldCom. These scandals cost investors billions of dollars when the share prices of affected companies collapsed and therefore shook public confidence in the nation’s securities markets.
The Big Picture of this process can be illustrated using the picture below:
1. Verify the scope of the project deliverables developed in house.
2. Accept the procured deliverables through the procurement closure process.
3. Get the deliverables from Step 1 and Step 2 and get them accepted by the customer or sponsor to actually close the project.
4. Archive the project documents.
In a nutshell, all the aspects of the project closure should be covered, such as financial closure, legal closure, and administrative closure, with all the relevant parties, such as vendors and customers external and internal to the performing organization.
Prev: Introduction to Closing the Project
Next: Verifying the Scope of Project Deliverables